Credit Card Advice please

imogenrose05

Hi All,

I used to have a shoddy credit rating but it seems to be loads better now.
I am planning on applying for a mortgage in the new year and so hoping you can shed some light on the following:
1. I have 2 credit cards, one tesco which is 18% ish and one sainsburys which is 0% at the moment. I took the Sainsburys one out to transfer the Tesco balance. I did Martin's new credit score thing and it says it's good that I am using a very small amount of available credit ( i have £8000 available but have spent £1000). Am i best to keep both cards for mortgage application purposes or to cancel one??

2. I have a loan from the bank to pay off old debt that i incurred in my youth. It's 8% and I've been paying it for a year now. Obviously the interested amount to a few hundred quid. Is there anyway to move this onto a credit card of 0%? Am I better off leaving it until after i have applied for my mortgage?

3. My partner has never had a credit card. He will be applying for a mortgage with me. Should he get one?

Thank you :):):):):):):):):)

YorkshireBoy

When you say "shoddy" credit rating, what do you mean?...it wasn't good or it was bad? If bad, why, specifically?

You could consider shifting the loan onto a money transfer card such as those offered by MBNA and Virgin Money. If you do this, I'd close Tesco down so you hit the mortgage application with only 2 cards. Obviously you wouldn't then have a credit card for purchases. Out of interest what's the loan balance?

A credit card would help your partner establish some history, albeit only 3-6 months or so (assuming they've no loans etc...ever?).

But for anything more specific in terms of advice you'd need to disclose your incomes and any other financial commitments you each have at the moment, and you might not wish to do that.

Plutonomics

Two cards open should be fine and have no negative impact on the application. For your partner I'm not sure, usually you'd want to do any credit applications at least 6 months before the mortgage, so it depends when in the new year you're planning to buy (e.g. if it's January I'd imagine it's not worth applying, if it's June then it'll likely help him to build up a little credit history).

One thing on the loan, make sure you check the settlement terms, e.g. are there any settlement fees and how is the interest calculated. If the interest is already added on at the start then there's no point transferring it. Also sometimes it's worth paying off the bulk of the loan but letting the last payment go out through direct debit to get around the settlement fee.

imogenrose05

My loan balance is now sitting at £6k, it was 8K so I am happy to be reducing it. I have mainly used my credit card for fixing my car and a city break on it. I pay more than the minimum payment each month.

I said shoddy because i took out some high interest cards (vanquis and aqua) because i wasn't educated in credit cards. This was a huge mistake and i missed payments not realising the implications. This was about 3 years ago now and i haven't missed a payment since.

I definitely do not need both the Tesco and Sainsbury's card and am wondering if having both will hinder or help my chances?

Also on the loan, it's HSBC and I had one previously and when I paid it off early, they took off the interest that hadn't accrued yet.

It is all complicated and I have learnt so much and lecture my younger siblings on what not to do!

enthusiasticsaver

I don't think having 2 will hinder your chances if they are clear or almost clear. I normally have 2 and pay them both off each month and that is the ideal you want to get to although I know some keep a 0% card and keep the balance in savings. If you apply for a money transfer card to pay off the loan I would close the Tesco one.

It might be an idea for your partner to get one but I would be wary of both you applying just before applying for a mortgage.